SLA and Productivity – Friends or Enemies?

The overwhelming majority of Service Providers will have their performance and responsiveness measured against Service Level Agreements (SLA’s) – contractual obligations with the customer defining certain quality standards.

Most businesses rely on service providers to support their day-to-day operations. For many companies, this dependency means a fault occurring can have a significant impact on their business if one of their service providers fails to deliver the appropriate level of service in a timely manner. Therefore, once the contract is signed, ensuring the supplier adheres to SLA requirements is usually the customer’s number one priority.

But should SLA be the only performance measure that a service manager is accountable for? What about cost of service? Where does productivity fit in?

Service managers will often justify underutilised resource by referring to SLA’s.

“I don’t give them a full day’s work in case a P1 comes in.”

There is a common perception that an increase in utilisation will have an adverse impact on SLA attainment.

“I need spare capacity because we need to be reactive.”

Just-in-Case rather than Just-in-Time

This attitude can lead managers to always have sufficient resource available, ready to deal with the worst possible situations, at all times. This built-in contingency is expensive but often accepted as a necessary cost, particularly if a manager has dealt with a major failure before and does not want to repeat that experience.

If different performance metrics, such as productivity, are either unavailable, ineffective or unreliable, it becomes difficult for senior managers to challenge these assertions and a potentially dangerous attitude towards resourcing can take hold, resulting in spiralling costs as more and more resource is thrown at a problem until it goes away.

Working in an environment where there is constantly not enough work for everyone will foster undesirable behaviours, such as job pacing, late starts, early finishes and, ultimately, lack of output and job satisfaction.

Hand in Hand

What is needed is a balanced approach to resourcing with respect to SLA requirements, based on a scientific and detailed approach to resource forecasting.

Installing an effective Management Operating System, driven by the principles of active management and short interval control – removing issues systematically and comparing what was planned against what was actually achieved on a daily, weekly and monthly basis across a range of performance measures (not just SLA!) will give managers the potential to live in the best of both worlds.

What separates a passive manager from an active one is the fulfilment of that potential by taking effective action to improve the metrics. If you are consistently achieving SLA requirements, whilst recognising spare capacity in the team, can you reduce your costs? Or bring in more work without increasing headcount? Upskill team members?

Viewing SLA as a very important measure within the wider view of operational productivity, rather than as a catch-all measure for service performance, will allow high productivity to work hand in hand with high SLA attainment as friends, not in a tug-of-war, as enemies.